Swissair Group has abandoned efforts to save its debt-ridden carrier, and is to transfer its important routes to its regional subsidiary, Crossair. The move, part of a rescue plan by the country's top banks, is expected to lead to 2,560 job losses.
Under the plan, which Swissair Group accepted on Monday, the company will sell its holding in Crossair to Switzerland's two biggest banks, UBS and Credit Suisse for about SFr260 million.
In addition, Swissair will transfer many of its key European and long-haul routes to Crossair, which in effect will become the country's flag carrier. The airline says it will keep the name "Crossair", although it has the option to change it to "Swissair".
The effect will be to transfer two-thirds of Swissair assets to Crossair, leading to the loss of 2,560 jobs at Swissair, of which 1,750 would be in Switzerland.
Marcel Ospel, chairman of UBS said the plan would enable "a fresh start for Switzerland's airline industry".
"It is important for the Swiss public and for our economy and financial centre that a national flag carrier should provide services out of Switzerland," he said, adding that "in light of Swissair's situation, there is no viable alternative to the proposed way forward".
In a statement, both banks said they view the purchase of Crossair as a financial investment and that overall responsibility for the operational management would rest with Crossair.
The banks are to provide further support for Crossair in the form of SFr500 million in additional working capital. They will also make available a capital increase of SFr350 million, provided the new company is granted the necessary operating licences.
As far as Swissair is concerned, the banks will grant it a standby facility of SFr250 million which, along with the proceeds from the sale of shares to Crossair, will help the company to maintain its airline-related activities.
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